Smartphone Technology Puts Mobile Scanning Power in Customers' Hands

No more waiting on long checkout lines, Walmart says. That’s because in dozens of its stores, customers can use their iPhones to scan products[4] as they shop and pay at a self-checkout.

“Your shopping experience has just been upgraded,” Walmart[5] writes in promotional materials.

Scan & Go lets users scan their groceries with their iPhones, and “then quickly pay at the self-checkout registers and you’re out the door.”

The app is currently compatible with about 70 stores, most of which are near Bentonville, Ark., and Atlanta. The company plans to expand the technology to 12 new markets — including Denver, Phoenix and Dallas — for a total of 200 stores, according to a published report.

“Scan & Go is a new way to shop in Walmart stores that allows YOU to take control of your shopping experience,” according to Walmart promotional materials.

To get Scan & Go, shoppers download the Walmart app from Apple’s App Store. The app recognizes they are within a Walmart store, and a message appears asking if they would like to enter “Store Mode.” They then scan barcodes with their phone, and place the items in their cart.

When they are finished shopping, they go to a self-checkout register and select the “Transfer Your Mobile Basket” button on the register screen. On their phone, users select the “Done Shopping” button near the top of the screen. They scan a QR code on the register screen to transfer items from their phone to the register, and pay for their purchases.

Shoppers can answer a phone call or text message while using Scan & Go. Their phones will redirect them to Scan & Go once they are finished with their call. Currently, Scan & Go is only available on Apple iPhones running iOS 5 or greater. An Android version is coming soon.

Walmart touts Scan & Go as a way for consumers to stay within their budgets because it keeps a running total of items in their cart.

“You will know how much you’ll spend before arriving at the register,” according to Walmart. “It’s a faster, easier way to shop, saving you time and money along the way!”

Indeed, mobile scanning can benefit both the retailer and consumer. On the retail side, the benefits are potentially faster checkout resulting in lower labor costs and access to customer data.

Walmart’s Scan & Go test could motivate other retailers to explore similar technologies, said Thomas Murphy, principal of consultancy North Highland Co., Charlotte.

“Many of them will be watching this effort closely and may even strategize on how and when, or even if, to respond,” said Murphy.

But Murphy cautioned that retailers are conservative when it comes to embracing new technologies. So it’s questionable if these technologies will take off at retail.

“The industry did not quickly jump on the RFID bandwagon after Walmart piloted it, so similarly, the competition will not rush into this,” Murphy noted.

Likewise, the technology[8] is not without its challenges, Murphy added. The potential for shrink and the level of consumer acceptance are among them.

But a growing number of retailers say the pros outweigh the cons. Take Woodman’s Market[9], Janesville, Wis., which launched iPhone mobile scanning in one store in January, and may roll it out to its other 13 stores within the next few months.

Woodman’s mobile shopper app is iPhone-friendly. An Android version is in the works. Photo courtesy of Woodman’s Market

At Woodman’s Gammon Road store in Madison, Wis., shoppers can use their iPhone to create a shopping list before they go to the store. They then scan items with their phone as they shop.

“We have found that it benefits the customer in various ways: speedy checkout, knowing their total whenever they add an item to their basket, and sorting items to optimize their trip through our large stores,” said Chad Greenwald who oversees Woodman’s point-of-sale operations.

To use the system, shoppers must download a free Woodman’s app located in the App Store.

To check out, shoppers go to self-checkout stations and scan a QR code with their phones to transfer their mobile shopping information to the POS system. The self-checkout station confirms the weight of the items scanned with the phone against that of the items being bagged. Produce, other non-barcoded items and impulse items can also be added at the self-checkout.

Shoppers then pay with their preferred method of payment. The store features free Wi-Fi so shoppers do not have to use their own data plan while using the Mobile Shopper app.

The system is currently equipped only for iPhone users, but an Android version is in the works.

About 500 shoppers at the Gammon Road store have registered for a mobile shopper account, according to Dan White, director of retail mobile solutions, NCR Corp., the Duluth, Ga.-based company that provides the technology.

In addition to saving time at the checkout, the technology is a customer service because it helps shoppers keep a running tally of their shopping cart, said White.

“Studies show that people are scared of going over their budgets, so knowing their total as they shop is a big help,” he said.

The technology is a perfect fit with Woodman’s stores because of its heavy focus on self-checkout, White said. The test store is one of its busiest stores and has 26 self-checkout lanes.

“This is another way to get customers out of the store faster,” he said.

Plus, there’s a cost savings for retailers because they’re leveraging a device the consumer owns so they don’t have to pay for hardware.

There’s also ease-of-use on the consumer side, White noted.

“Consumers are already familiar with the device,” he said.

NCR is exploring additional uses for the app, including the ability to send promotional offers to users, and mobile payment via a PayPal account.

Pioneer of Mobile Shopping

Ahold USA[11] is considered a pioneer of mobile shopping. It introduced store-provided handheld Scan It! scanning devices about six years ago to Stop & Shop stores.

The retailer has since introduced a smartphone app that lets shoppers use their phones to scan and bag groceries and then transfer the completed order to a checkout lane for payment.

The Scan It! mobile app has been rolled out to about 270 Stop & Shop locations that have similar functionality in a store-provided scanning device.

While other mobile scanning apps are limited to iPhones, Ahold’s is also available for Android users. Another unique aspect is that users receive promotional offers as they shop — a key component other retailers are exploring.

“When you first launch Scan It!, you can see your exclusive personalized offers whether you’re in or out of the store,” according to a video demo on the Stop & Shop website.

“Ahold’s program usage is high and awareness is high,” she said. “Its success is what makes other retailers interested in adopting tools like this.”

Consumers embrace the technology because it gives the perception that they are more in control of the shopping process. They also believe that it saves them time in the store (although a CatapultRPM study shows that mobile scanning actually adds 10 minutes to the shopping experience.)

The next step for mobile scanning is mobile payment.

The business community is closely watching mobile payment technology at Starbucks Coffee Co., which launched its own mobile payment technology in January 2011.

Starbuck’s deepened its commitment to the technology late last year when it began accepting the Square Wallet mobile payment application.

With Square Wallet people can use their phone to browse the menu, pay at Starbucks and view their transaction history, and explore nearby businesses.

Customers download Square Wallet to their iOS or Android device to set up an account. Square Wallet is linked to their debit or credit card, so there is never a need to reload a balance. Customers tap “pay here” and scan their QR code — similar to the customer experience on the existing Starbucks mobile payment applications. Their digital receipt appears instantly.

Such efforts make sense at a time when about 50% of shoppers have a smartphone, and are using them for everything from obtaining coupons to comparing prices, said CatapultRPM’s Nishanian.

“Smartphones are fueling the ‘always on’ shopping environment,” she said.